Clients often hire our firm to create new corporations or limited liability companies. The goal here is to help clients protect themselves from personal liability. A corporation or limited liability company is a legal entity that has its own existence, separate and apart from the individuals who own it. A limited liability company or corporation can enter into its own agreements, own property, and participate in its own business affairs.
When you own a limited liability company or a corporation, it is the company (and not you) that is responsible for liabilities, debts, and expenses.
Forming a New Business in Ohio
In order to form a new corporation or limited liability company, the first step is to file paperwork with the Ohio Secretary of State. You will provide the agency with the name of the entity, the purpose of the entity, the owners of the entity, and the address where the entity will be doing business. There is a filing fee when you file this paperwork with the Ohio Secretary of State.
Once you file this paperwork, it usually takes the Ohio Secretary of State three to five business days to recognize the new entity and send you a certification page. This will officially confirm the new entity name and the date that the entity was formed.
Obtaining an EIN
Once you have received this certification page from the Ohio Secretary of State, your next step is to obtain an employee identification number (“EIN”) from the Internal Revenue Service. This process can now be performed online with the Internal Revenue Service. The quickest way to obtain an EIN is to go online to the IRS official website and answer a series of questions about your new entity. It is usually a 10 to 15 minute process, and, at the end of the questionnaire, the IRS will provide you with a PDF version of the paperwork that provides your new EIN number. It is critical that you provide the exact name of the entity and the correct Ohio Secretary of State Registration Number that is outlined in the certification page from the Ohio Secretary of State.
After obtaining an EIN, it is then critical to open up a bank account for the new entity and complete a company notebook. Outline all of the events leading to the formation of your new entity, all of the minute notes for your shareholders (if a corporation) or members (if a limited liability company), and all of the minute notes for all of your directors (if a corporation) or managers (if a limited liability company).
Documents You Will Need
You will need to have an experienced business law attorney draft several documents, including an operating agreement. If there are several shareholders or members, we also recommend that you also have buy/sell agreements, non-competes, and non-solicitation agreements that thoroughly outline all of the terms and conditions agreed to by the owners of the entity. It is important to document these meetings and obtain the necessary paperwork. This helps you to show that the business is operating on a daily basis and complying with all of the formalities mandated by the Ohio Revised Code.
Don’t Forget About Insurance
Finally, it is critical that you also consult with your insurance agent. Your agent should discuss with you all of the necessary insurance to protect your business.
Contact Our Firm
If you’re planning on opening a new business in the state of Ohio, contact our firm today. We’re happy to help you with filing the necessary paperwork and drafting agreements.